micro

Although regulation and corrective taxes are both capable of reducing pollution, regulation accomplishes this goal more efficiently true or false

false

European arrivals in 1722 AD resulted in importation of diseases and unsuitable fishing pressure that led to the collapse of the Easter Island Society

false

GATT is an example of a successful unilateral approach to achieving free trade true or false

false

The US tax burden is high compared to man European countries true or false

false

The small-economy assumption is necessary to analyze the gains and losses from international trade true-false

false

a tariff increases the quantity of imports and moves the market farther from its equilibrium without trade

false

according to the principles and guides governing Federal water and land planning projects, the US Army Corps of Engineers is exempt from considering contributions to the nations output of goods and services and environmental statutes and laws when planning navigation projects

false

economists believe that the optimal level of pollution is 0

false

if education produces positive externalities and the government does not intervene in the market, we would expect

the equilibrium quantity to be lower than optimal level

When the nation of Mooseland first permitted trade with other nations, domestic producers of sugar experienced a decrease in producer surplus of $5 million and total surplus in Mooseland's sugar market increase by $2 million. We can conclude

the opening of trade caused the domestic demand curve for sugar in Mooseland to shift to the right

The benefits principle of taxation can be used to argue that wealthy citizens should pay higher taxes than poorer ones on the basis of

the wealthy benefit more from services provided by government than the poor

Free trade allows firms to realize economies of scale, resulting in higher costs of production true or false

true

Individual income taxes and social insurance taxes generate the highest tax revenue for the federal gov't

true

Patent protection is one way to deal with technology spillovers true or false

true

one solution to the "tragedy of the commons" is to turn the common resource into a private good

true

when firms internalize a negative externality the market supply curve shifts to the left

true

The best remedy for market failure is often

externalizing the externalities

Which of the following is not a characteristic of pollution permits? a. Real-world markets for pollution permits include sulfur dioxide and carbon b. prices are set by supply and demand c. firms for whom pollution is very expensive are willing to pay for more permits than firms for whom pollution reduction is less expensive d. allowing firms to trade their permits reduces the total quantity of pollution by the initial allocation

D. allowing firms to trade their permits reduces the total quantity of pollution beyond the initial allocation

Horizontal equity can be difficult to assess because it is difficult to compare the similarity of tax payers

False

The federal health care spending program that specifically targets the poor is called

Medicaid

Why do some policymakers support a consumption tax rather than an earning tax

a consumption tax would raise more revenues than an income tax

A payroll tax is also referred to as a social insurance tax true or false

True

under the congressional office 2013 proposal to raise Federal Excise Taxes on motor fuels, the stated primary goal would be to increase budget surpluses (true false)

True

when the social cost curve is above a product's supply curve

a positive externality exists in the market

total taxes paid divided by total income is called the

average tax rate

Import quotas and tariffs produce some common results. Which of the following is not one of those common results a. the domestic country experiences a dwl b. revenue is raised for the domestic government c. total surplus in the domestic country falls d. producer suprlus in the domestic coutnry increases

a. the domestic country experiences a DWL

Which of the following is not a typical solution to the Tragedy of The Commons a. turning the common resource into a club good b. taxing the use of the common resource c. regulating the use of the common resource d. turning the common resource into a private good

a. turning the common resource into a club good

negative externalities occur when one person's action s

adversley affect the well-being of a bystander who is not a party to the action

When a country takes a multilateral approach to free trade, it a. removes trade restrictions on its own b. is willing to trade with multiple countries at once c. does no remove trade restrictions no matter what other countries do d. reduces its trade restrictions while other countries do the same

b . is willing to trade with multiple countries at once

Which of the following statements is NOT correct? a. Both corrective taxes and tradeable pollution permits reduce the cost of environmental protection and thus should increase the public's demand for a clean environment b. corrective taxes set the max quantity of pollution, whereas tradeable polllution permits fix the price of pollution c. tradable pollution permits have an advantage over corrective taxes if the gov't is uncertain as to the optimal size of the tax necessary to reduce pollution to a specific level d. both corrective taxes and tradable pollution permits provide marked-based incentives for firms to reduce pollution

b. corrective taxes set the max quantity of pollution, whereas tradeable polllution permits fix the price of pollution

The before-trade price of fish in Denmark is $10 per pound. The world price of fish is $6 per pound. Denmark is a price-taker in the fish market. If Denmark begins to allow trade in fish, its consumers of fish will become

better off, its producers of fish will become worse off, and on balance the citizens of Denmark will become better off

the free-rider problem exists with a. knowledge b. online music subscriptions c. all of the above are correct d. public transportation

c. all of the above are correct

goods that are rival in consumption include both

common resources and private goods

Trade among nations is ultimately based on

comparative advantage

market failure can be caused by

externalities

If the world price of coffee is higher than Colombia's domestic price of coffee without trade, then Colombia

has a CA in coffee and should export

The largest budgetary expense for the federal gov't in 2011 was

income security

both public good and common resources are

nonexcludable

Assume for Guatemala that the domestic price of coffee without international trade is higher than the world price of coffee. This suggests that

other countries have CA over Guatemala in the production of coffee and Guatemala will import

The Coase Theorem asserts that in the presence of externalities

private economic actors sometimes can reach a bargain that produces an efficient outcome

suppose the electricity producers create a negative externality equal to $5 per unit. Further suppose that the gov't imposes a $5 per- unit tax on producers. What is the relationship between the after tax equilibrium quantity and the socially optimal quantity of electricity to be produced?

the after tax equilibrium quantity is greater than the socially optimal quantity